Most analysts today see little chance of a return to $100-per-barrel oil prices anytime soon, but few are forecasting prices to hit $35 and stay there for five years. The parliamentary budget office recently forecast oil prices would rise slowly over the next five years, to US$59 a barrel.

CMHC stress-tested four other scenarios, and the harshest involved a five-year run of deflation around the world. In that “worst-case” scenario, Canadian house prices would fall 44 per cent, and unemployment would rise to 16 per cent.

Many market observers have grown concerned about house prices in Canada, which they say have grown so high that the market is at risk of a correction.

Some analysts say years of rock-bottom mortgage rates are essentially the one thing holding up the market, and they warn of falling prices if and when interest rates rise.

A CMHC report earlier this fall found overvaluation in 11 of 15 housing markets it looked at. The agency singled out Toronto as being particularly at risk of a correction.

But Siddall said the unemployment rate is a better indicator than interest rates of where the housing market is headed, because job losses can lead people to sell their homes or default on their payments.

He said Canadians’ high debt levels make them more “vulnerable” to an economic downturn, according to the CBC.